Sunday, February 20, 2011

Revolving debt usury "a great thing for South Dakota"

From today's Sioux Falls Argus Leader Business Journal. It's a fact that the financial growth and well being of Sioux Falls specifically and South Dakota generally came from various state and federal actions that allowed SD to host revolving debt businesses. Employment, service sector businesses, and certain government revenues and services all hinged on decisions that allowed usurious lending.

...Citibank opened a credit card center in February 1981 in Sioux Falls, which jump-started the city's financial services industry...

...Thomas Reardon moved that the association propose that regulated institutions be removed from the usury limit. Reardon's brother-in-law, Pierre banker Chuck Burke, seconded the motion. Hajek learned years later that Reardon had arranged to have Burke second the motion to keep the proposal alive...

...The slightly stunned bankers left the meeting wondering whether they really could sell the idea of eliminating usury rates on banks. However, bill sponsors were found, and the measure passed the first house without much fanfare and was cruising to approval.

About this time, Citibank contacted Gov. Bill Janklow and expressed interest in potentially moving its credit card operation from the restrictive regulatory environment of New York. Janklow and the Legislature enthusiastically obliged the company by approving technical legislation that would allow Citibank to do business in South Dakota...